Poverty Reduction

Poverty Reduction – Programme — UNDP in Nepal

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SL 1.2 Pro-poor policy reform to achieve MDG targets

SL 4.1 Conflict prevention and peace building

SL 2.6 Decentralization, Local Governance and Urban/Rural Developments Pro-poor policy reform to achieve MDG targets

Since the 1970s there has been a steady decline in poverty in Nepal and large improvements in the levels of human development. The proportion of Nepalis living in poverty dropped from 42% in 1995/96 to 31% in 2003/04. In spite of these gains, poverty alleviation remains the priority concern of Nepal's government as over eight million of its citizens still live in poverty and the gap between the better-off and the poorest sections of society is widening. It also remains a key concern as the sustainability of recent improvements is questionable with many of the gains being due to increasing remittance incomes rather than in-country improvements. Economic growth is sluggish and not enough new jobs are being created.

In recent years, there has been an unfavourable environment for overcoming the longstanding structural barriers to pro-poor economic growth. The conflict had a large negative impact on the economy, made it difficult for the government to implement its policies, and drew attention and resources away from development towards security. The introduction of progressive reforms and of decentralised local governance have been seriously hindered by the absence of elected local government since 2002, the absence of parliament since 2003 (to April 2006), and the royal takeover of power in 2005.

In assisting the Government of Nepal to realize its overall poverty reduction strategy, UNDP has embarked on projects such as Operationalisation of the MDGs in Nepal, Programme Support Initiative of Human Development and Enhancing Nepal's Trade Related Capacity to get a better understanding of the prevailing socio-economic situation and to provide significant upstream policy advice to the government. Both have made significant contributions to the PRSP and the 10th Plan.

Over its two and a half years of 'Operationalisation of the MDGs in Nepal', the project has helped integrate the Millennium Development Goals (MDGs) into Nepal's national and district level planning systems. The benefits of this are to focus development efforts on poverty alleviation and to promote cooperation and joint working by the government, donors, and other agencies. The project carried out important analytical work to inform policy making and planning. In partnership with the National Planning Commission, the project produced the second national MDG progress report, five district MDG progress reports, policy gap analyses of the five most important development sectors, and an MDG needs assessment. The extensive consultations for preparing these documents and UNDP's close working relationship with the National Planning Commission, the ministries, and the DDCs has led to officials from these agencies recognising the importance and value of the MDGs as a planning tool. The project also enabled the government to more systematically monitor its five-year plans by supporting the National Planning Commission to produce and publish the 2004/05 and 2005/06 progress reports.

In 2006 UNDP launched a new round of assistance to map the levels of human development in Nepal. Preparatory work is underway to produce the next Nepal Human Development Report. These documents provide accessible and valuable information for planners and policy makers. The current project is continuing previous UNDP support to establish masters level courses on human development in Nepal's universities. Such a course started in Pokhara University in 2006 and preparations are well-advanced to include human development in Purbanchal and Tribhuvan University masters courses. This initiative is also supporting the government to integrate the MDGs in its interim plan (2008-11). The main outcome so far has been the National Planning Commission producing a framework and MDG-based strategy for Nepal's development.

In 2007 the new trade and human development initiatives will begin to make an impact. The Enhancing Nepal's Trade Related Capacity (ENTRC) project will explore Nepal's trade potential in promising new areas, help develop and market commodities where Nepal has a competitive advantage, expand the government's engagement with the private sector to develop the country's trade potential, and build institutional capacities to plan for trade development.

UNDP has launched a new Capacity Development for Aid Coordination and Management project in February 2007. This project has started work with the Ministry of Finance's Foreign Aid Coordination Division and the National Planning Commission. UNDP assistance toward reducing poverty in Nepal has seen very positive and tangible results. More people have found venues through which to better participate in economic and social life. UNDP has helped in spurring local empowerment and social mobilisation in Nepal. These important advances need to be sustained.

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